Well we had an exciting week last week, lots of good movment so lets look at what that movement really means and some important things to look at/for this coming week.

Nationwide economic announcements this week were primarily focused on “Rates.” Bank of Japan (BOJ), Reserve Bank of New Zealand (RBNZ), and Federal Open Market Committee (FOMC) all released their latest “Rates” showing no changes. Each economy discussed signs of improvement in specific area’s imports/exports, consumer spending, financial) but with consumers continuing to be cautious and home sales and unemployment making minimal gains, economic conditions remain sluggish. However, as a whole, expectations are optimistic for significant improvement in all sectors by mid to late 2010. Although each individual economic “Rate” statement is important, the U.S“FOMC” has more significance to Forex trading and your time would be best spent in reviewing U.S statements.        

FOMC statement

For the last 2 weeks indices and commodities have been in a selling frenzy pushing the dollar and yen higher. While UUP (US dollar index) continues to push higher the S&P and DJIA (Dow Jones Industrial Average) subsequently turn lower. As you can see in figure #1 (DJIA) the up-trend has broken and is currently consolidating. It’s also at the next major support area (10,100). If it breaks below that level it could continue down to (9,840) which would provide more opportunities to buy USD and YEN.

(IMAGE COMING…)

In figure #2 (UUP) there was an “inverse head and shoulders” pattern that is currently underway. The next significant support/resistance level is at (23.70). If price continues up toward that level, again look for buying opportunities on USD.

(IMAGE COMING…)
 
To best implement this bias, look for pairs (with USD as base or quote currency) that are at or near significant support or resistance and plot out good areas for buy/sell stops. That way if those patterns do play out you’ll be prepared to execute.

Also, regarding the US GDP number that were released last Friday, there was some confusion on the market about how this news should be interpreted, read what some analysts are saying about those OH SO IMPORTANT NUMBERS:

GDP and NFP, what to look for.

As for the rest of the movement, just tune into our live sessions and keep up with the market update videos and lets make some pips!

Happy trading,

Jared J.

This entry was posted on Sunday, January 31st, 2010 at -07:0020101731America/Phoenix31: pm31 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.